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19 December
2016

Technology


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ARE ONLINE WORK PLATFORMS CREATING A FRICTIONLESS LABOR MARKET?


Hernan Galperin & Catrihel Greppi, Guest Contributors (ITUC)

This report was featured as a chapter in “TRANSFORMATIONS IN TECHNOLOGY, TRANSFORMATIONS IN WORK”- a joint report co-authored by the global partners of JustJobs Network.

Emerging economies are struggling to cope with the global jobs crisis, as vulnerable employment and underemployment continue to plague their labor markets. At the same time, there is growing optimism that online talent platforms are set to drive employment and wage growth in developing countries, by creating a level playing field and shifting employment from high-wage to low-wage countries. The projected gains from online labor platforms however, depend on the ability of these platforms to bridge important information gaps in the labor market.

This study examines Nubelo – the largest online labor platform for Spanish-speaking employers and workers – and find that employers, whenever they lack complete information about potential employees, tend to award online labor contracts based on nationality.

Workers based in developing countries are less likely than Spanish workers to win contracts from employers in Spain and earn lower wages – even when all other factors, like qualification and prior work experience, are equal. This isn’t because Spanish employers are inherently prejudiced against workers from developing countries, but because their preferences are affected by lack of information.

The study offers policy recommendations that would help bridge these information gaps and realize the potential of online labor platforms to create more and better employment for workers worldwide.


 Research

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